Friday, July 16, 2010

Stupid Banks

Bank executives must be the stupidest people in the world. Back in the 1960s and 1970s, American banks loaned billions of dollars to Latin American countries. When they defaulted, it caused a crisis in the 1980s. There was also the S&L crisis around that time. But did the bankers learn anything from those fiascos? No.

Overly risky bank lending practices nearly brought our economy to its knees in 2008, and we are still feeling the effects in 2010. Despite massive bail-outs by the government, banks still aren’t lending to small businesses like they should, thus slowing our recovery. Moreover, they are resisting government efforts at reform.

It seems every week or so I get something from a bank in the mail soliciting business, usually wanting me to get a credit card. In the envelope is an application form with my name and address on it. My credit card company also sends me blank checks with my name, address, and account number on them. Haven’t these banks heard of identity theft? I have to look over carefully and shred these unsolicited documents so that my identity doesn’t get stolen. What’s wrong with these banks?

It’s obvious banks don’t have our best interests at heart. Unfortunately we don’t have much of a choice. We need banks, but let’s hope they start doing business a little smarter. So far their track record hasn’t been too good.